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Friday, 18 December 2015

Crude futures fell in Asian trading on Friday as fresh signs of inventory building and the Federal Reserves rate hike this week kept prices under pressure amid a global glut of oil that shows no sign of abating.

US crude's West Texas Intermediate (WTI) futures CLc1 were down 18 cents at USD 34.77 a barrel by 0104 GMT (8.04 am EDT). The contract fell 1.6 percent to USD 34.95 a barrel on Thursday.

Brent LCOc1 fell by 19 cents to USD 36.87 a barrel. It fell 33 cents to USD 37.06 a barrel on Thursday. Both contracts are on track to post a third week of losses, with US crude down 2.4 percent and Brent off by 2.6 percent.

WTI is less than 60 cents away from the low reached during the global financial crisis of USD 32.40 in December 2008, while Brent is less than 70 cents off its nadir of USD 36.20 the same month.

Gold steadied on Friday but largely retained losses made a day earlier when the metal suffered its biggest slide in five months after the Federal Reserve hiked US rates for the first time in nearly a decade.

FUNDAMENTALS

* Spot gold ticked up 0.3 percent to USD 1,053.96 an ounce by 0051 GMT as the dollar eased on profit taking following sharp gains.

* The metal slid 2 percent on Thursday, its biggest one day slide in five months. It is down 2 percent for the week in its worst weekly performance in six weeks.

* Gold has come under intense sell off since the Federal Reserve raised the range of its benchmark interest rate by a quarter of a percentage point on Wednesday, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.

* The move sent the dollar to a two-week high on Thursday against a basket of major currencies.

* On the other hand, gold saw little interest, with investors sending the yellow metal to USD 1,047.25 in the previous session, close to a near-six-year low.

* Gold has tumbled 11 percent this year, largely on uncertainty around the timing of the rate rise and on fears that higher rates would hit demand for the non-interest-paying metal.

* Many are predicting further drops. Gold is likely to test the key USD 1,000 level soon, technical analysts said.

* Assets in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, fell 0.70 percent to 630.17 tonnes on Thursday, the lowest since September 2008.

Thursday, 17 December 2015

Crude futures fell in Asian trade on Thursday, adding to sharp losses the previous session after the Federal Reserve raised rates for the first time in nearly a decade and official figures showed a surprise build in U.S. inventories.

West Texas Intermediate for January delivery, the front-month contract, was down 12 cents to $35.40 a barrel by 0248 GMT after finishing down nearly 5 percent on Wednesday.

Brent crude for February delivery, the front-month contract from Thursday, fell 21 cents to $37.18. The global benchmark fell $1.34 to $37.39 the previous session.

"Last night's inventory data from the U.S. was clearly unsettling," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"We are now seeing signs of the U.S. dollar getting stronger in our time zone as well, following on from the Fed," he said.

The dollar added almost 1 percent to 98.812 against a basket of major currencies and looked set for another test of stiff resistance around the 100.00 mark.

The U.S. Fed hiked interest rates for the first time in nearly a decade on Wednesday, a sign it believes that the U.S. economy had largely overcome the calamity that was the 2007-2009 financial crisis.

Higher U.S. rates typically support the dollar, making oil and other commodities denominated in the greenback more expensive, undermining demand.

Gold slipped on Thursday, giving back some of its overnight gains, in choppy trading after the Federal Reserve raised US interest rates for the first time in nearly a decade.

The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.

Gold has slumped nearly 10 percent this year, largely on uncertainty around the timing of the US rate hike and on fears that higher rates would hit demand for the non-interest-paying precious metal.

Though the Fed decision removes an overhang for gold prices, the focus now shifts to the central bank's pace of future rate increases. Spot gold dipped 0.2 percent to USD 1,070.70 an ounce by 0037 GMT.

The metal had rallied before the Fed decision on Wednesday and managed to hold on to most gains post the central bank statement, ending the day up 1.2 percent. US gold GCcv1 fell 0.6 percent to USD 1,070.50, following a 1.4 gain in the previous session.

Wednesday, 16 December 2015

US oil prices fell in Asian trade on Wednesday, snapping two days of gains that pulled crude back from testing 11-year lows, as investors awaited the outcome of a Federal Reserve meeting that will likely raise interest rates.

West Texas Intermediate fell 50 cents to USD 36.85 a barrel by 0048 GMT after rising more than USD 1 on Tuesday.

It fell to USD 34.53 on Monday, the lowest since it financial crisis bottom of USD 32.40, before ending the day higher. Brent had yet to trade. The contract settled up 53 cents at USD 38.45 a barrel on Tuesday, closing higher for the first in eight days.

On Monday, the global oil benchmark came within 14 cents of a December 2008 bottom of USD 36.20, unleashing a surge of buying support.

The Federal Reserve on Tuesday started a two-day meeting where it is expected to raise rates eight years after a devastating recession opened an era of loose US monetary policy.

A rise in rates is typically negative for oil prices because a hike is likely to prop up the greenback, making crude contracts more expensive as they are denominated in dollars.

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